Daily Price Action
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EURJPY to Remain Under Pressure Below 128.50

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Important: I use New York close charts so that each 24-hour period closes at 5 pm EST.

Click here to get access to the same charts I use.

Similar to last week’s GBPJPY commentary, the EURJPY broke below a short-term 4-hour trend line on Thursday. On second thought, I should say the pair fell off a cliff during the final 48 hours of last week.

The 260 pip plunge on Thursday left the EURJPY below the 128.50 handle on a daily closing basis. Keep in mind that I use New York close charts which are essential for trading price action. You can go here to get access to the same charts I use.

Today we’re seeing some consolidation below that 128.50 level that is now serving as resistance. To me, this sideways movement following last week’s impulsive selloff suggests that the next leg lower is imminent.

As long as the EURJPY trades below 128.50 on a daily closing basis at 5 pm EST, I will stay bearish. Key support comes in at 126.30. It isn’t the most obvious horizontal level on the chart, but it did act as a pivot between the 29th and 31st of May.

The 126.30 level is also very near the 2015 low at 126.09, making it one to keep an eye on going forward.

A daily close below 126.30 would re-expose the current 2018 low at 124.60. Alternatively, a daily close back above 128.50 would at minimum offer temporary relief for bulls and pave the way for a move back to 130.30.

Note that ECB President Draghi speaks in a few hours at 1:30 pm EST. He is also scheduled to speak on Tuesday at 4 am EST and again on Wednesday at 9:30 am EST where BOJ Governor Kuroda will join him.

It’s unclear what impact these speeches will have on the EURJPY if any, but it’s a good idea to account for a possible increase in volatility around the times listed above.

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EURJPY 4-hour chart

Leave a Comment:

19 comments
Rene says

Thank you for your analysis of the current developments in the Forex market. Can you please explain the sentence “next leg lower is imminent”? Do you mean a bear’s flag?

Reply
    Justin Bennett says

    It means the next move is likely to be lower and we may not need to wait long to see it.

    Reply
Hatinder says

Thanks for such clear commentary

Reply
    Justin Bennett says

    You’re welcome.

    Reply
Stanley says

Good analysis

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    Justin Bennett says

    Cheers.

    Reply
OOF says

Looking for pullback to 129.000 first. Weerkly pivot at 128.82

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STEPHEN ,GBALUKE says

Perfectly said, I ‘ve entered short at 128.159 looking at 122 handle in the next 3 to 4 weeks stop loss at 129.300

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Ferdinand Abia says

Meaningful forecast.

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Tshepo says

Very good analysis Mr Justin

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Ikechukwu says

nice work Justin..i dont get this message updates on my phone anymore, what happened to it

Reply
    Justin Bennett says

    Cheers. You’ll have to be more specific. There are several forms of mobile updates.

    Reply
Bradley says

how are u seeing the eurusd?

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PETER says

thanks for this setup JB.

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Brenda says

Enter your comment…thanks Justin already
banked my profit you are the best and thanks a a lot have a blessed day

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Harc says

Enlightening and instructive analysis. Your arrows and shoot straight to the eyeball… well appreciated!

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alex says

that is so right justin thanks alot

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SirChrist says

Good day sir,thank you so much for your work,it greatly improves my understanding. so right now its safe to hold 127.69 as our new resistance and still having 126.370 as the exposed support?

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